Vultures Circling: These 2 Retailers Set To Gain Most From Bed Bath & Beyond Bankruptcy

After months of flirting with bankruptcy, Bed Bath & Beyond Inc. (NASDAQ: BBBY) announced on Sunday morning that it has filed for Chapter 11 protection. 
The firm had previously indicated in January that it would be declaring bankruptcy shortly, and it used a variety of unconventional strategies to stay afloat since then. 

Thus, the market had already largely discounted the news, with shares down 88% year to date before shedding another 32% on Monday.
The firm has indicated that it will keep the remaining 360 Bed Bath & Beyond shops and 120 buybuy BABY locations operational during a scheduled shutdown, provided that it is able to find a buyer for its remaining assets. The competition is in full swing to win over as many of Bed Bath's former clients as possible.

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Wayfair and Overstock Could See Modest Gains, According to BofA

Curtis Nagle, a research analyst at Bank of America Securities, stated in his most recent study that revenue from the Bed Bath & Beyond wind-down will be widely dispersed across the market's top rivals, namely Walmart Inc. (NYSE: WML), Amazon Inc. (NASDAQ: AMZN), Target Corp. (NYSE: TGT), Wayfair Inc. (NYSE: W), and Williams-Sonoma Inc. (NYSE: WSM). Nagle predicted that Wayfair Inc. and Overstock.com Inc. (NASDAQ: OSTK) would see the strongest relative gains from Bed Bath & Beyond's bankruptcy.

Wayfair revenue would climb 2% for every 5% of Bed Bath & Beyond revenue, while Overstock revenue would increase 3% for every 1% of Bad Bath revenue, according to the analyst. 

The analyst does not expect RH (NYSE: RH) or Arhaus, Inc. (NASDAQ: ARHS) to see much, if any, potential revenue upside from Bed Bath & Beyond's bankruptcy, given their significantly more wealthy client base and emphasis on furniture, which is not a big market for Bed Bath & Beyond. 

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